Union fund not my fiefdom: ex-AWU boss

The former Victorian head of the Australian Workers Union (AWU) denies setting up an alleged slush fund to get around rules preventing union money being spent on internal elections, including his own.

Cesar Melhem, now a Victorian Labor MP, told the unions royal commission that thousands of dollars in cash cheques were often made from the fund to support political campaigning.

But he denied treating the Industry 2020 fund he set up in 2008 as his fiefdom and using it to pay his allies.

"I wouldn't put it in those terms but I did use Industry 2020 as a vehicle to assist like-minded individuals (who) ... have progressive ideas and want to stand at elections and advance the right of workers," Mr Melhem told the inquiry on Monday.

He said the 2020 fund was set up for election purposes, including his own election, and "other political activities".

It undertook several fundraising activities, including a 2008 luncheon with then deputy prime minister Julia Gillard at $550 a head.

The inquiry heard 2020 paid thousands of dollars in cash to help Diana Asmar's 2009 campaign for the Health Services Union (HSU) election.

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But Mr Melhem said that in hindsight, he should not have handed cash to anyone.

"I thought I was doing the right thing but winding the clock back, it's probably something I would not have done."

Mr Melhem recalled the HSU contributed money to 2020 as part of its fundraising and 2020 then paid money for HSU members running for office, at least once.

But he denied this was a way to circumvent rules preventing unions funding officials' election campaigns.

"My understanding is if I was to use the AWU funds for my own election, that would be contrary to the AWU rules," he said.

"In relation to a union's assistance of other people in other union elections, that's not clear to me whether it's consistent or inconsistent with various union rules."

Mr Melhem also rejected suggestions that fundraising events for 2020 were marketed in a misleading way, making it appear they were for the union rather than its internal political activities.

The inquiry also heard the AWU received payments of $4000 a month for seven months in 2003-04 from a company, Chiquita Mushrooms.

AWU assistant branch secretary Frank Leo denied the payments were compensation for lost union dues after the company sought workers from a labour hire firm, saying it was to provide training for workers.

The money went into the union's general revenue stream.

Former Chiquita Mushrooms boss Stephen Little recalled the training was given in a two-hour seminar.